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Vietnam: Unverified Reports that the HD 981 is Back By Carlyle A. Thayer 

C3S Paper No. 0006 / 2015

We request your assessment on a very urgent issue. Vietnamese Coast Guard

sources have revealed that China has towed its oil rig HD 981 back into Vietnam’s Exclusive Economic Zone (EEZ). zone. The authorities are continuing to verify this development. Could you provide your assessment of the following issues:

1 We all expect that the oil rig will be back. But does this return at this stage come as any surprise?

ANSWER: If the presently unverified reports that China has moved the HD 981 oil exploration platform back into Vietnam’s Exclusive Economic Zone are confirmed it would be a totally unexpected development that runs counter to the current trend of resetting China-Vietnam relations back on a positive course. Further, if the reports are true, it would lead to a massive erosion in strategic trust between China and Vietnam following understandings reached by high-level leaders. For example, when Special Envoy Le Hong Anh visited Beijing in August, he reached agreement with General Secretary and President Xi Jinping on three points. Point three included: “to seriously implement the agreement on the basic principles guiding the settlement of sea related issues;” to resume government-level negotiations on borders and territory, control maritime disputes; and “not act to complicate or expand disputes…” During the December visit by Yu Zhengsheng, member of the Chinese Communist Party Politburo Standing Committee and chairman of the National Committee of the Chinese People’s Political Consultative Council, Yu proposed that both sides should “enhance political trust and build consensus.”

2. If that is true, what do you make of the timing of the return of the rig? Does it have anything to do with the fact that Vietnam filed a statement of interest to The Hague Permanent Court of Arbitration to back the Philippines’ lawsuit?

ANSWER: The timing of such a purported move is inexplicable and would appear totally cynical. Vietnam and China have been working hard to restore relations. While China may be angered that Vietnam submitted a statement of interest to the Permanent Court of Arbitration, Vietnam has not formally joined the Philippines in taking legal action. Vietnam has kept its statement of interest confidential. If China is reacting to Vietnam’s actions, China will only provoke Vietnam to take further legal measures. China’s actions are likely to provoke a strong reaction from Vietnam particularly on the eve of the tenth plenum of the Vietnam Communist Party Central Committee.

3. How tough would it be for Vietnam to deal with the oil rig this time? What lessons need to be drawn?

ANSWER: If China’s oil rig is accompanied by a large number of escort ships on a scale similar to May-July 2014 there is very little Vietnam can do to remove the oil rig physically from Vietnam’s EEZ. Vietnam will have to resort to another round of confrontation at sea between its Coast Guard and Fishery Surveillance Force. This time Vietnam will find that international media and diplomatic support will be forthcoming. Major external powers will be quite angered that China has resorted to “gun boat diplomacy” so soon after Beijing’s “charm offensive” at last year’s APEC and ASEAN summits.

4. How would the possible return of the rig affect Sino-Vietnamese relations? How would it affect the global and regional geopolitical status quo?

ANSWER: If confirmed, the return of the HD 981 will tear apart Sino-Vietnamese relations. If the first episode eroded strategic trust, the second incident will undermine all current efforts to reset bilateral relations. It will be extremely difficult for Vietnam’s leaders to rely on party-to-party ties and shared ideology as a basis for normal relations. China’s purported actions will undermine Vietnam’s efforts to multilateralize its external relations. Vietnam is likely to move much closer to the United States, Japan and Europe. In sum, in geo-political terms, if China returns its oil rig to Vietnam’s EEZ this could well contribute to regional polarization and even undermine ASEAN’s attempt to create an ASEAN Community by the end of this year.

5. Any further comments you care to make?

ANSWER: Recently Linda Jacobson, an Australian-based China specialist, argued in a report that Xi Jinping was not all powerful and had to answer to institutional interests. Her argument will be undermined if reports that China has returned the HD 981 to Vietnam’s waters are confirmed. It will expose Xi Jinping as a political opportunist not interested in pursuing a peaceful rise.

Follow up comment [January 5, 2015]: I am informed that the HD 981 is being taken to Myanmar to engage in oil exploration activities. It may have passed through Vietnam’s EEZ but this is perfectly legal under international law. Client email query: But is there any possibility that it may change course and veer into Vietnam’s Exclusive Economic Zone? Then what does Vietnam need to do to brace for that?

ANSWER: All countries have the right to transit through the EEZ of coastal states. It is perfectly legal for China to tow the HD 981 through Vietnam’s EEZ in order to go to Myanmar. If China entered Vietnam’s EEZ and parked the HD 981 to begin commercial operations that would be another matter, a violation of Vietnam’s sovereign jurisdiction.

(Article reprinted with the permission of the author Carlyle A. Thayer, Emeritus Professor,The University of New South Wales at the Australian Defence Force Academy, Canberra email:

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